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16-1 Error Correction PDF

Roxas Company has identified several errors in their financial statements for the years ended December 31, 2020, and 2021, requiring corrections to net income. The corrected net income for 2020 is P 1,460,000 and for 2021 is P 2,170,000, with specific adjustments listed for accrued salaries, inventory, prepaid insurance, and depreciation. Adjusting entries are provided for both open and closed books as of December 31, 2021.

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Kier Tabz
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2K views9 pages

16-1 Error Correction PDF

Roxas Company has identified several errors in their financial statements for the years ended December 31, 2020, and 2021, requiring corrections to net income. The corrected net income for 2020 is P 1,460,000 and for 2021 is P 2,170,000, with specific adjustments listed for accrued salaries, inventory, prepaid insurance, and depreciation. Adjusting entries are provided for both open and closed books as of December 31, 2021.

Uploaded by

Kier Tabz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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ERROR CORRECTION!!!

ERROR CORRECTION!!!
ERROR CORRECTION!!!
ERROR CORRECTION!!!

ERROR
Roxas Company
Correction
ERROR
has made several errors for the year ended
DecemberERROR
Correction
31, 2021.
Correction

Click “Fix” to fix error.

Fix
REQUIRED:

A. Prepare worksheet showing corrected net income for


2020 and 2021.
CORRECTED NET INCOME
2020 2021
Net Income P 1,750,000 P 2,000,000
Salary accrued omitted:
2020 (100,000) 100,000
2021 (140,000)
Inventory - December 31, 2020 overstated (190,000) 190,000
Prepaid insurance unrecorded on Dec. 31, 2021 120,000
Interest receivable unrecorded on Dec. 31, 2021 20,000
Other income overstated (160,000)
Depreciation overstated ____________ 40,000
Corrected Net Income P 1,460,000 P 2,170,000
REQUIRED:

B. Prepare adjusting entries on December 31, 2021, assuming


books are still open.
ADJUSTING ENTRIES ADJUSTING ENTRIES

1. Retained earnings P100,000 4. Accrued interest receivable 20,000


Salaries 100,000 Interest income 20,000

Salaries 140,000
Accrued salaries payable 140,000 5. Miscellaneous income 220,000
Accumulated depreciation 240,000
Equipment 400,000
2. Retained earnings 190,000 Gain on sale of equipment 60,000
Inventory - Jan. 1, 2020 190,000

3. Prepaid insurance 120,000 Accumulated depreciation 40,000


Insurance 120,000 Depreciation 40,000
REQUIRED:

B. Prepare adjusting entries on December 31, 2021, assuming


books are closed.
ADJUSTING ENTRIES ADJUSTING ENTRIES

1. Retained earnings P140,000 4. Accrued interest receivable 20,000


Accrued salaries payable 140,000 Retained earnings 20,000

2. No adjustment 5. Retained earnings 160,000


Accumulated depreciation 240,000
Equipment 400,000
3. Prepaid insurance 120,000
Retained earnings 120,000
Accumulated depreciation 40,000
Retained earnings 40,000
Errors have been fixed.
Do you have any questions?
Thank you
Alviar, Raila Elaisa
Bagadiong, Erica Quiel T.
Bongon, Dionne Cristel R.
Sarmiento, Carylle Edriane A.
Tanael, Rezy Madelaine T.
Tendencia, Francis S.
Tumanlao, Louie Vicente O.

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